King's Lynn's Human Capital Department asks whether businesses can cope with an increase in the minimum wage
Recently the Chancellor of the Exchequer, Sajid Javid, announced the Government’s intention to give four million people a pay rise.
Sounds like a vote winner. The intention is to increase the Minimum Wage, or National Living Wage as it is known as for over 25-year olds, to £10.50 per hour within the next five years and ‘end low pay’.
The regulations are quite complicated with four bands of minimum wage –16-17-year-olds £4.35; 18-20-year-olds £6.15; 21-24-year-olds £7.70 and 25-year-olds and over £8.21.
It was also announced that the top band will be 21and over so a welcome simplification to reduce the bands from 4 to 3.
This is a very laudable aspiration, but I wonder how many local businesses will be able to afford this increase in labour costs, especially the small and medium-sized businesses that are our clients, at this time when the economy is quite fragile, and companies need to restrain costs to survive?
Unfortunately, employment law and regulations are quite complex and constantly changing, regardless of Brexit, so it is difficult to keep on top of things – we are often contacted by local companies needing advice about employment matters, but are surprised that employers are not adhering to rules and regulations relating to employing people.
Often it is because they don’t know about the regulations – but unfortunately ignorance of the law is not a defence.
Recently we challenged a payroll company which was paying staff below the minimum wage and were shocked by their reply, that it was not their responsibility to enforce the regulations. Tell it to the judge!
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